Vancouver, British Columbia, Canada, 11 October 2011 – Western Forest Products Inc. (TSX: WEF) has reached an agreement to sell Tree Farm Licence 60 (TFL 60) and related assets on Haida Gwaii to Taan Forest Limited Partnership, a partnership of the Council of the Haida Nation and Haida Enterprise Corporation, the business arm of the Haida Nation.
Under the terms of the sale, Western will receive net proceeds of approximately CAD 11.6 million and certain ongoing rights to cedar logs harvested by Taan. Taan will assume substantially all of the obligations of Western on Haida Gwaii. The net proceeds from the sale will be used to pay down the company’s debt in accordance with its lending agreements. The agreement is expected to close before the end of the year.
“We have been in discussions regarding this sale with the Haida Nation for more than two years, and the Minister of Forests has already provided notice that the TFL sale can now proceed. As the average annual timber harvested off TFL 60 by Western over the past five years has been modest, the sales will have no impact on our long-term operating rates at our eight lumber mills. Proceeds from the sale will further strengthen our balance sheet and provide us with additional flexibility to pursue strategic initiatives. We have no plans to sell any other Crown timber tenures,” said Dominic Gammiero, chairman and chief executive officer.
Western is an integrated Canadian forest products company and the largest coastal British Columbia woodland operator and lumber producer, with an annual available harvest of approximately 7.4 million cubic meters of timber, of which approximately 7.2 million cubic meters is from Crown lands, and lumber capacity in excess of 1.5 billion board feet from eight sawmills and four remanufacturing plants. Principal activities conducted by the company include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, and value-added remanufacturing. Substantially all of Western’s operations, employees, and corporate facilities are located in the coastal region of British Columbia, while its products are sold in more than 25 countries worldwide.